Types of Pension Cases
(1) Superannuation
(2) Family Pension
(3) Voluntary Retirement (VR )
Rules
(i) The qualifying service for evaluation of pension is reduced to 10 years w.e.f. 02 09.2008. Earlier it was 33 years.
(ii)
Pension is evaluated on the basis of the last 10 months average pay
or last pay drawn whichever is beneficial to retiring employee
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Terms related to the PENSION Calculation
(i) PENSION
(ii) DCRG (Death Cum Retirement Gratuity)
(iii) COMMUTATION
(iv) RESTORATION of Pension
(v) FAMILY PENSION
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How to calculate Pension
The
pension amount is calculated based on the Basic Pay at the time of
retirement, Age, Service years, etc. It is calculated as 50% of
average emoluments of last 10 months salary drawn. It is calculated on
Basic and Dearness Pay only.
SMP means Six monthly period of qualifying service
Formula for Calculation of Pension Amount =
50% of Avg. emoluments (last 10 months) or 50 % emoluments
drawn on the retirement
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DCRG
Formula for Calculation of DCRG
Last Salary Drawn X SMP
= -----------------------------------------
4
OR
Last Salary Drawn X SMP
= --------------------------------------- (in case of
Death) 2
COMMUTATION
· At the time of retirement of the employee, a portion of pension can be withdrawn by the employee.
· A
maximum of 40% of pension amount can be withdrawn at the time of
retirement. However, depending on the amount withdrawn proportionate
amount will be deducted from the Pension amount till 15 years and
employee will get reduced Pension till 15 years.
Formula for calculation of Commutation
= Commutation Percent of Full Pension x Age Factor x 12
Formula for calculation of Reduced Pension
= (Full Pension – Commutation Percent of Full Pension)
+ DA on Full Pension
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If
employee is dead before attaining his qualifying Service of
Retirement, The calculation of DCRG in such case is as follows
DCRG = Total Pay X Multiplying Factor
(Total pay = Basic pay + Grade Pay )
Where Multiplying Factor varies as follows
Service Life MF
1 to 5 years 6
5 to 20 years 12
above 20 SMP / 2 (in case of death)
SMP / 4 (on retirement)
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Method for calculate family pension
Step 1 Calculate Total Pay ie Basic Pay + DP ( A= Basic Pay + DP )
Step 2 Calculate 30 % of Total pay ( B= A*30/100)
source:nfpemavelikara.blogspot.com
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Thursday, March 29, 2012
How to calculate Pension,DCRG,Commutation etc...
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